G.M. Begins Great Escape from Obama the Nefarious

G.M., get back in the house!

Well well. Amidst the rather shaky economy news we find General Motors beginning the process of moving out of Obama's house. This should be a stunning antidote to those working under theory (and inspired by mental linguists like Glen Beck) that President Obama had intentions to rework a thoroughly capitalist nation while everyone was asleep at night. G.M. announced an I.P.O. to begin the next step in restructuring itself. We don't doubt that there are still considerable problems with how our car companies run day to day operations. They dug themselves into a hole in the first place through bad designs and expensive legacy benefit obligations to retired workers. Reversing a culture of stagnation is a complicated process requiring extraordinary people with a will to move forward. This I.P.O is a move forward.

The move includes the U.S. government selling at least a portion of its ownership stake in GM that came about as a result of the government bailout of the auto industry after the financial crisis caused by the recession in the past several years. The U.S. Treasury Department has a 61 percent ownership stake in GM after the federal government spent $50 billion to keep GM afloat.

GM is not selling any shares and will not receive any money from the offering. The shareholders selling are the U.S. government, and other large owners.

(Portfolio.com)

None of this will matter to alarmists and the host of sudden ubber patriots that are busy moving their shallow kiddie pools to the garage to make room to grow their own vegetables when the Nefarious One takes away all we know and love. These people are not looking at facts, nor do they know how to string together the economic process in a way that makes any sense. Obama is president now and things look shaky now, therefore it must be Obama. It's like walking down the grocery aisle and confusing the person cleaning up the pickle jar spill with the person (long gone down to the frozen chicken patty aisle) who actually caused the spill and got things slippery and hazardous on Aisle 1.

Reality impedes, with a clear example that bailing out the car companies was no more a grab at America's private enterprise system than was bailing out the banks. You can rightfully argue the merits of bailing out the car companies since they are not integral to the capitalist financing system like banks are. So the criticism should have been, "Hey President Obama, why the somewhat arbitrary bailing out of one manufacturing industry." The minute a critic goes beyond that and starts talking socialism, you can be sure their real problem is not with actual economic reality.

We can go a step further though into a more obvious and important point. Right now we still here the claims that bailing out the major financial firms--"the banks," "Wall Streeters"-- was somehow shafting the little guy. "It's all a game," say the cynical wise men, failing to question exactly how an entrepreneur raises money for a new business, or how an existing business gets funding for expansion or other activities.

Take note:

GM said Morgan Stanley and J.P. Morgan, BofA Merrill Lynch, Citi, Goldman, Sachs Co., Barclays Capital, Credit Suisse, Deutsche Bank Securities, RBC Capital Markets, and UBS Investment Bank will be the joint book-running managers for the offering.

The list of names is like a Wall Street roll call. What are they up to? Helping a major American manufacturing company facilitate a necessary business transaction. The transaction is the virtual opposite of what Obama is accused of, but also, it shows the great utility in having a vibrant and multi-headed financial sector.

G.M. is playing it safe in getting so many firms involved, but that is a necessity in these times. The fact that G.M. can spread the task to so wide a group shows the rightness of the TARP bank bailouts. Half these firms would probably be collapsed or seriously unable to function without the action initiated by Bush and perpetuated by President Obama.

How many agitated folks, up in arms and ready to pronounce Obama the Nefarious as destroyer of everything are seriously taking each new piece of data, linking it to history, to economic theory and practice, and forming logical progressions that would help them understand policy choices in the right context?